There is a breakthrough in the high-profile tax case of cryptocurrencies. The Ministry of Finance releases people investing in these instruments from the need to pay the Tax on Civil Law Actions. They just have to prove that they can not account for this

19/04/2018

The matter is controversial. On Friday, investors announce to the Ministry of Finance a protest regarding excessive taxation of cryptocurrencies. Now the Ministry of Finance is meeting them.

Cryptocurrencies have become very popular this year in Poland. It is not only known how to settle tax from them. When asked about this, the Finance Ministry initially announced that the income from cryptocurrencies must be paid income tax, and additionally, tax on civil law transactions from each transaction.

It caused a storm. Because people who invest in cryptocurrencies all day would have to pay gigantic taxes. Bigger than what they’ve invested.

Therefore, the ministry is changing its mind. It recognizes that this second tax – on civil law transactions – violates the so-called ‘tax-advantage’ principle.

The principle of taxation convenience functions. If we can settle accounts, it is real and possible, then we should settle it. PCC is being challenged at the moment, because there is no tax advantage. It is difficult to tax three hundred, four hundred or one thousand transactions with one taxpayer and compel him to submit PCC every time – Deputy finance minister Paweł Cybulski says.

Therefore, we already see, and we are going in this direction, that there is no tax advantage in the PCC tax. It is a tax that is not adapted to the realities of cryptocurrencies – adds the minister.

It means that if someone can pay PCC from cryptocurrencies, he should do it. If not, then the treasury promises a gentle approach.

Below, talk with Deputy Minister of Finance Paweł Cybulski. The key fragments are taken in the quote:

Krzysztof Berenda, RMF FM: How to account for people who invest in cryptocurrencies and earn on it?

Paweł Cybulski, deputy finance minister, undersecretary of state, deputy head of the national Treasury Administration: This is a problem that has existed since 2012. As far as I know, the Ministry of Finance has already tried to determine how to settle cryptocurrencies. The problem has quieted up a bit. He fell silent until the case related to Amber Gold went out loud and possible repetition of this scheme on the web. Therefore, the will of the government is to sort this out.

At the outset, we sent a message that reflects the current legal situation. I do not say, however, that this is a target situation and convenient for taxpayers, but we have such a legal status. So far, we’ve announced how the system looks now. For now, we will be careful, some distance. We’re working on changes. We want to offer taxpayers new, better forms of settlement that will be convenient and simple.

But what do people with cryptocurrencies have to do now? For now, the communiqué of the Ministry of Finance states that cryptocurrencies must pay income tax and every tax on Civil Law Transactions. It caused a storm. The last speaker was deputy finance minister Paweł Gruza, who said that you are working on new regulations. So what exactly should a person trading cryptocurrencies do? Settle PIT plus PCC? Wait for new guidelines? Because there is not enough time to settle.

The principle of taxation convenience functions.

If we can settle accounts, it is real and possible, then we should settle it. That is, it is necessary to pay attention to income tax. As for the PCC tax, it is being questioned at the moment, because there is no tax advantage. It is difficult to tax three hundred, four hundred or one thousand transactions with one taxpayer and compel him to submit PCC every time.

Therefore, we already see, and we are going in this direction, that there is no tax advantage in the PCC tax. It is a tax that is not adapted to the realities of cryptocurrencies. Of course, court interpretations clearly state that cryptocurrencies are property rights, so we should settle accounts with PCC. But this is indeed a very questioned thing and as I stress it is an inconvenient tax. It does not give us the opportunity to settle in a reliable way.

So people trading in cryptocurrencies now have to settle only for income tax, and PCCs to skip?

I’m not saying not to settle PCC. I say to settle PCC when it is possible to settle. When it will be convenient. So if we made one transaction on cryptocurrencies, with one taxpayer. But let me emphasize that I am talking about convenience.

If it is possible to settle in PCC, then let us settle. We already have many taxpayers who have settled PCC for cryptocurrencies. In other cases, we have an inconvenience. We have a dispute and we must resolve it in the near future.

And so: if someone has the convenience of settling this in PCC, then I am asking you, it should look like this. But I suspect that most taxpayers will not be able to fold 400, 500, 1000 PCC per day. It is simply an inconvenience, the inability to settle in this PCC tax. The law says yes, but there is no possibility of physical settlement.

If it is not possible, then we should not make sanctions.

And who will decide if I have the “convenience” to settle with PCC, or did not I have such “convenience”? Because it is obvious that, in your words, most people will say that it has not had the convenience of settling with PCC and will not do it. Who will decide? Offices? Courts?

For sure we will approach it more liberally than strictly.

For sure, we will not try to draw taxpayers money in a forceful way. For sure we will want to do it wisely.

Reason lies in the fact that we must understand the situation of the other side. We have to look at it humanly, not cold, stiffly, according to the letter of the law. This letter of law at this point is completely different from reality, from the possibility of exercising this right.

And where will the limit of what is convenient and what will not be determined? Is it inconvenient to settle 10, 100, or only 1000 transactions?

This is a relative thing, whether it is 100 or 200. The most important is reason. We must look to see if the taxpayer has the opportunity to settle

It is preparing a terrible mess.

No. Because it can be such a situation that someone who has made 500 transactions has the opportunity to settle, and someone who made 10 may not have this opportunity, because he did not know who is the party to his transaction.

We will be very careful when it comes to the law. We will be very sensitive to these topics. We will be more liberal than strictly speaking this border.

We will only catch cases that indicate that the taxpayer could settle in a bright way, and he did not.

Is this the final message of the Ministry of Finance in this matter?

As Minister Gruza announced, we will want to issue a message by the end of the month. We will invite experts and we will start work together.

But these arrangements will concern the future? Next years?

Yes. Future. And as for the current cycle, we will have to take some reasonable actions that will not destroy taxpayers. We will approach it very, very wisely.

Source: http://www.rmf24.pl/ekonomia/news-przelom-w-sprawie-kryptowalut-nie-trzeba-placic-podatku-od-c,nId,2570984